Avoiding Tax Scams with the LITC
With the rise of technology and online platforms in the 21st century, the ability to generate tax scams is higher than ever. As a result, we’ve compiled a list of common tax scams and how you can prevent them from happening to you!
Pandemic Related Tax Scams
The pandemic has been used as a tool for online scammers to pull sensitive information from taxpayers and those in economic hardship as a result of the pandemic through emails or SMS/text.
How can we mitigate this?
- Use the two-factor (2FA) or multi-factor authentication (MFA)
- Keep anti-virus software automatically updated
Scams targeting educational institutions, including students
Recent scammers have begun to scam students with an edu. email in order to collect confidential information from them. Scammers may use subject lines such as “Tax Refund Payment” or “Recalculation of your tax refund payment” to lure students into clicking an attached link and giving information.
How do we mitigate this?
- Report the scam at phishing@irs.gov
- Get an Identity Protection PIN: This is a pin that helps prevent identity thieves from filing fraudulent tax returns in the victim’s name.
Charity Fraud Tax Scams
Scammers may use fake or impersonate charities to trick taxpayers to donate to their organization or receive personal information. Scammers will typically do this by mail, on the phone, or through social media.
How do we mitigate this?
- Do not give personal information to any organization that seeks a contribution.
- If you choose to donate, the IRS website has a search feature, Tax Exempt Organization Search, that helps users find or verify qualified charities.
IRS Impersonation Telephone Scams
This scam targets both taxpayers and vulnerable communities, such as recent immigrants. These phone calls include scammers claiming to be with the IRS, stating that you owe money. Scammers will typically request money through wire transfer or gift card and argue that if unpaid, you will be arrested.
How do we mitigate this?
- The IRS will ALWAYS contact you by mail. Do not make any payments or give information unless a notice in the mail from the IRS arrives.
Scams Related to Spear Phishing
Spear Phishing is a targeted type of phishing where scammers use specific information about the victim to target them. Scammers will often pose as potential clients, exchanging several emails with tax professionals before following up with an attachment that they claimed was their tax information in order to implement viruses into their computer.
How can we mitigate this?
- Use the two-factor (2FA) or multi-factor authentication (MFA)
Identity Theft and Unemployment Benefits
During the pandemic, many layoffs occurred. Many scammers took advantage of this by filing false claims for unemployment compensation through
using the stolen personal information of individuals who had not filed claims.
How do we mitigate this?
- Get an Identity Protection PIN: This is a pin that helps prevent identity thieves from filing fraudulent tax returns in the victim’s name.
- Taxpayers who receive an incorrect 1099-G Form should contact the issuing state agency to request a revised form.
We hope these tips and education on the different types of tax scams helped you prepare in taking the next steps to mitigate tax scams from affecting you. Remember, the IRS will ALWAYS contact you by mail, and if you are ever unsure if a notice is a scam or not, reach out to the IRS before making any payments.